The Chicago market is doing relatively well compared to other markets in the US. Specifically, when compared to Florida, Las Vegas, or California. I had heard a rumor that lenders in Florida are no longer writing loans for condos! :-( We definitely don’t have that kind of market here.
Several of my lender partners are seeing a marked increase in the popularity of FHA loans. This loan was designed for the first time home buyer or those that did not qualify for a conventional (20% down) mortgage. The loan fell out of favor when lenders were writing the exotic loan types (ARMs, option, no doc). Since those have gone away, the FHA loan is really a great option. Buyers only have to have 3.5% of the purchase price down and do not need stellar credit. If the building is already FHA approved, there is no FHA inspection required. Buildings that are not FHA approved can become approved relatively easily.
Recently, one of my clients also utilized a CRA loan to purchase a single family home or 2-flat. The CRA or Community Reinvestment Act is a loan offered by banks that have branches in a community. The federal government requires the bank to write a certain number of mortgages to the community that it serves. The wonderful thing about the CRA loan is that it is not income based. It can be a 97% loan and the buyers can have seller or family contributions for the down payment or closing costs. The buyers do not need to have a certain income threshold to qualify and their credit does not need to be perfect either. The only requirement is that the home be located in low or middle income census tract. Some examples of that are Logan Square, West Town, Lower West Side…
With these tools available and lower home prices, buyers have a wonderful opportunity to purchase a home.
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